Why The Mayweather-Pacquiao Fight Could Ignite MGM And Signal A Strong Buy Now
Howard Jay Klein • 11 Comments
Howard Jay Klein • 11 Comments
Tue, Jun. 14, 12:54 PM
- The NHL has decided to place an expansion team in Las Vegas for the 2017-2018 season, sources tip the Associated Press.
- An announcement is expected during the NHL board of governors meeting on June 22.
- Las Vegas also appears to be in the mix for NFL and NBA relocations. Recent comments from the league commissioners, although carefully crafted, are decidedly warmer than in the past.
- Related stocks: LVS, MGM, WYNN, FLL, CZR, BYD
- Related ETF: BJK
Tue, Jun. 14, 9:24 AM
- The buzz out of Macau is that gaming revenue is trending positive after the first 12 days of June.
- Telsey Advisory Group estimates 5% Y/Y growth, although the analyst team says a high hold percentage could be behind the bump. Sterne Agree confirms the strong start, but notes that the shift of the Dragon Boat Festival to earlier in the month and the potential impact of the Euro soccer tournament need to be considered.
- Wells Fargo adjusts its forecast for June revenue growth in Macau to -4% to -7% vs. -10% in May after factoring in the early numbers.
- Macau casino stocks: Wynn Macau (OTCPK:WYNMF, OTCPK:WYNMY, WYNN), Sands China (OTCPK:SCHYY, OTCPK:SCHYF, LVS), MGM China (OTCPK:MCHVF, OTCPK:MCHVY, MGM), Galaxy Entertainment (OTCPK:GXYEF), SJM Holdings (OTCPK:SJMHF, OTCPK:SJMHY), Melco Crown (NASDAQ:MPEL).
Fri, Jun. 10, 8:19 AM
- Shares of several Chinese railroad stocks fell sharply today after XpressWest called off a deal to use China-based companies to build a high-speed train between Los Angeles and Las Vegas.
- XpressWest said it had trouble getting around federal requirements on using domestic manufacturers for the project.
- China Railway Construction (OTC:CWYCF, OTCPK:CWYCY) fell 5.4% in Hong Kong trading and China Railway Group (OTC:CRWOF, OTCPK:CRWOY) was down 4.8%.
- XpressWest CEO Tony Marnell said the company is still committed to the L.A-to-Vegas high-speed train. The $100 round-trip transportation initiative has been discussed for years, with construction finally slated to begin next year. That timetable looks likely to be scrapped.
- Related stocks: LVS, MGM, WYNN, FLL, CZR, BYD.
Thu, Jun. 9, 2:45 PM
- Casino operators continue to find new ways to generate sales with gaming revenue under some pressure. The last round of quarterly reports from the sector indicated strong RevPAR numbers which means the hotel and restaurant side of the business is working well.
- A scan of Nevada gaming data over a 12-month period (5/1/15-4/30/16) might reveal some broader trends across the U.S. as the millennial generation factors into the equation.
- Nevada games and table win revenue -4.03% to $4.096B. Win percentage 13.14% vs. 12.60% for the preceding year. Baccarat and roulette fell off during the one-year period, while craps and new games contributed positively.
- Slot machine win revenue +2.8% to $7.013B. Win percentage 6.56% vs. 6.45% for the preceding year. Revenue from penny slots was up 7% Y/Y.
- Sports betting revenue growth: Football -2%; Baseball +79%; Basketball +17%; Parlays -34%.
- Sports betting win % comparisons: Football 5.4% vs. 5.5% prior; Baseball 4.3% vs. 3.1% prior; Basketball 5.2% vs. 5.1% prior; Parlays 26%. vs. 39% prior.
- Source: Nevada Gaming Control Board reports
- Related stocks: LVS, MGM, WYNN, FLL, CZR, BYD, ISLE, DRII, PNK, PENN, NYNY, OTCQB:TPCA, ERI.
- Related ETF: BJK.
Thu, Jun. 9, 8:43 AM
- Stifel Nicolaus bumps up its price target on Buy-rated MGM Resorts (NYSE:MGM) to $30 ahead of the company's June 16 Analyst Day event.
- The investment firm expects some developments out of the presentation which could drive share price gains, including discussion on real estate transactions and Strip cash flow generation.
- MGM closed yesterday at $24.97 after setting a 52-week high of $25 during the day.
- MGM Analyst Day webcast
Mon, Jun. 6, 2:21 PM
- The purchase by MGM Resorts (NYSE:MGM) of the Borgata could help to usher in the second wave of online gambling legalization, according to analysis from USPoker.com's Steve Ruddock.
- "If expansion occurs, multiple online gambling stakeholders will have national interests and realize a potential windfall from interstate agreements. This should make the barriers for interstate and even international agreements less daunting," writes Ruddock.
- Caesars Entertainment (NASDAQ:CZR) and 888 Holdings (OTCPK:EIHDF) top the list of pro-online poker players. Mohegan Sun and MGM Resorts with its interests in New Jersey, Michigan, and New Jersey are also likely to support more legalization.
- Previously: A deep dive into the Borgata deal (June 1)
Fri, Jun. 3, 11:08 AM
- MGM Resorts (MGM -1.5%) says it will spend $450M to rebrand the Monte Carlo casino complex in Las Vegas.
- The company will partner with Sydell Group to create a Strip version of the NoMad hotel and launch a new hotel called Park MGM.
- Construction at Park MGM and NoMad Las Vegas is expected to begin later this year and wrap up late in 2018.
Wed, Jun. 1, 11:30 AM
- The deal struck between MGM Resorts (MGM +1.4%), MGM Growth Properties (MGP +2.8%), and Boyd Gaming (BYD +2.7%) is seen as a positive for all three companies by Deutsche Bank analyst Carlo Santarelli.
- Deal breakdown: "MGM is essentially paying BYD $900 mm or ~8.8x. MGM will then sell MGP the real estate of Borgata for $1.175 bn and will pay rent in the amount of $100 mm annually. The property will roll into the master lease and be subject to the 2% annual escalator."
- Impact on Boyd: "While the deal is additive to equity value, it also helps BYD de-lever, a key to the story in our view, and mix more towards its higher multiple LV locals business."
- Impact on MGM: "MGM’s share of Borgata EBITDA remains effectively the same, MGM takes over day to day management of the property, and MGM receives, in a sense, $275 mm of additional cash."
- Impact on MGM Growth Properties (NYSE:MGP): "At the current 2017E trading multiple, the transaction adds roughly $1.50 per share to MGP."
- Santarelli ranks #527 out of 3,972 analysts listed on TipRanks.com
- Previously: MGM Resorts buys Borgata stake from Boyd Gaming for $900M (May 31)
Wed, Jun. 1, 8:26 AM
- Gross gaming revenue in Macau fell 9.6% Y/Y to 18.4B patacas ($2.3B) in May, according to the monthly report from the Gaming Inspection and Coordination Bureau. Revenue increased 6% in May on a month-over-month comparison.
- Tighter policies on phone betting and gaming promoters are seen as contributing to the weak month.
- Analysts expected a drop of 8% for May after revenue fell 9.5% in April. It's been two years since Macau has seen a month of positive revenue growth.
- Macau casino stocks: Wynn Macau (OTCPK:WYNMF, OTCPK:WYNMY, WYNN), Sands China (OTCPK:SCHYY, OTCPK:SCHYF, LVS), MGM China (OTCPK:MCHVF, OTCPK:MCHVY, MGM), Galaxy Entertainment (OTCPK:GXYEF), SJM Holdings (OTCPK:SJMHF, OTCPK:SJMHY).
Tue, May 31, 4:57 PM
- MGM Resorts International (NYSE:MGM) agrees to acquire Boyd Gaming’s (NYSE:BYD) 50% stake in Atlantic City’s Borgata hotel and casino for $900M.
- As part of the deal, MGM will sell the entire property to MGM Growth Properties, the REIT it created earlier this year, for $1.18B while operating the Borgata.
- After the deal closes, MGM will own all of the Borgata, which has been Atlantic City's top-performing casino since shortly after it opened in 2003.
- BYD says it expects to receive $600M in net proceeds after deducting its share of the property’s debt, and Borgata estimates it is entitled to tax refunds totaling $180M.
- Now read Boyd Gaming (still) looks good above $18
Fri, May 27, 10:06 AM
- The talk at the East Coast Gaming Congress and iGaming Institute conference was on the impact of proposed casinos in northern New Jersey near New York City.
- Voters in New Jersey will decide the issue in November, but it's what happens in New York if the measures passes that is creating the buzz. Some industry insiders think the Big Apple will consider allowing gambling inside Manhattan due to the threat just across the Hudson.
- "New York City will retaliate violently," summed up Resorts Casino Hotel president Mark Giannantonio.
- The prognosis on Atlantic City is that the city will lose three to five of its existing casinos if gambling opens up to the north.
- Related stocks: BYD, CZR, MGM, NYNY, PENN.
Thu, May 26, 1:03 PM
- The Nevada Gaming Board Control Board announces that gaming revenue decreased 2.44% in April to $876.07M.
- Las Vegas Strip revenue fell 1.54% to $491.2M, while revenue from downtown LV casinos was off 13.48% Y/Y.
- Casino winnings breakdown for April (partial list): Blackjack $79M, Craps $28M, Roulette $24M, Baccarat $105M (+10% Y/Y), Sports $14M (+70% Y/Y), Penny slots $242M.
- Fiscal YTD Nevada gaming revenue is up 0.67% to $9.275B (7/1/15-4/30/16).
- Gaming Control Board report
- Related stocks: LVS, MGM, WYNN, FLL, CZR, BYD
- Related ETF: BJK
Tue, May 24, 10:44 AM
- Football.Bet.com CEO David Leppo has a tip on how to increase revenue at Macau casinos.
- "Sports betting lounges are a necessary part of a well-rounded casino product," noted Leppo during his talk at a conference in Macau. He made the case that operators already have the extra floor space with table game limits in place.
- Sports betting is a paltry business in Macau with only SJM Holdings (OTCPK:SJMHF, OTCPK:SJMHY) having a token presence amid some tight local rules. A reminder to investors on why Macau officials may loosen their rules is well-represented in this table of monthly revenue tallies from the Macau Gaming Inspection and Coordination Bureau.
- Macau casino stocks: Wynn Macau (OTCPK:WYNMF, OTCPK:WYNMY, WYNN), Sands China (OTCPK:SCHYY, OTCPK:SCHYF, LVS), MGM China (OTCPK:MCHVF, OTCPK:MCHVY, MGM), Galaxy Entertainment (OTCPK:GXYEF).
Mon, May 23, 1:58 PM
- MGM Resorts (MGM +1.9%) and Wynn Resorts (WYNN +3%) have both filed documents with the Public Utilities Commission to leave as customers of NV Energy subsidiary Nevada Power. NV Energy is a subsidiary itself of Berkshire Hathaway.
- The casino companies want to save costs over the long term by buying electricity on the wholesale market.
- MGM has already agreed to pay a $87M exit fee, while Wynn is looking at a $16M bill if it decides to follow suit.
Fri, May 20, 9:24 AM
- The Nevada Gaming Commission approves Genting Berhad (OTCPK:GEBHF, OTCPK:GEBHY, OTC:GEBEY) to take a lead role in the development of a massive $4B project on the Las Vegas Strip where the historic Stardust Resort and Casino once stood.
- The Chinese-themed Resorts World Las Vegas property will include over 3K rooms and a 150K-square foot casino. An opening in 2019 is anticipated.
- What's notable about the project is that it's moving forward despite the tail-off of high-end Chinese gamblers in LV.
- Analysts think the Asian-focused Resorts World could be a net positive for other Strip properties due to the impact on tourism.
- Related stocks: WYNN, MGM, CZR.
- Related ETF: BJK.
Thu, May 19, 8:23 AM
- JPMorgan thinks MGM Resorts (NYSE:MGM) is going to run higher by the end of the year.
- Analyst Joesph Greff calls valuation on the casino stock almost silly when the recent balance sheet improvements are factored in.
- Las Vegas non-gaming catalysts are also in play for the company with the largest presence on the Strip.
- JP's price target of $29 implies 34% upside potential for MGM.
- Howard Jay Klein noted yesterday in a SA article that the Government of Macau's Mid-Term Review came in more positive than anticipated. "We believe the report is a bullish event in that it removes much uncertainty about how the government views the industry," wrote Klein.
MGM Resorts International operates as holding company that is primary engaged in the ownership and operation of casino resorts, which includes offering gaming, hotel, convention, dining, entertainment, retail and other resort amenities. The company operates through two reportable segments that... More
Industry: Resorts & Casinos
Country: United States
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